A Decision-Making Auction Algorithm for Demand Response in Microgrids

Distributed energy resources installed in the residential areas enable energy consumers to participate in the demand response of distribution systems. In the literature, the algorithms used for the decision-making process of an energy consumer are often centralized and require a dedicated communication link with the power utility. In this paper, a novel decision-making algorithm known as the auction decision process has been proposed. It helps energy consumers to independently meet the demand response in a decentralized manner. The resultant demand response operates in a distributed manner, where the limited information is transmitted among the neighboring consumers using the short-range ZigBee communication. This minimizes the required initial bulk investment for a power utility compared to using a centralized communication system. The data privacy is also improved when compared to the centralized approach. For this work, finding a path with the least transmission loss is selected as the desired constraint for the decision-making process of the demand response. The proposed method has been demonstrated using the IEEE 33 bus systems.